Coyotes get some help in finding new East Valley home

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The Arizona Coyotes took an important but tentative step toward their goal of playing in a new arena closer to their East Valley fan base, with an Arizona Senate subcommittee approving a financing bill.

But the 6-1 vote appeared to start on shaky ground. Some of the members of the Senate Transportation and Technology Committee expressed reservations about the bill, saying that they were voting for the measure to keep the effort alive and that they need to consult their constituents further before deciding on a final version.

The bill, sponsored by Sen. Bob Worsley, R-Mesa, would create a financing package for a $395 million arena. The cost would be split between the Coyotes kicking in $170 million, and $170 million in new sales taxes collected at the venue that would be plowed back into the construction cost. The cost also includes $55 million in bonds.
That represents half of the new sales taxes generated at a site that has not been determined. Worley said he amended a bill originally intended for building the arena as part of an Arizona State University sports district so that the financing could be used at any site.

ASU announced earlier that it was no longer interested in a development agreement with the Coyotes.

“This would not take any of our general fund dollars and it would give the Coyotes an opportunity to negotiate with Glendale or Phoenix or any other municipality that wants them,” Worsley said.

“I think there has been an effort to corner them,” Worsley said, in apparent reference to the Coyotes’ contentious relationship with Glendale, which terminated the Coyotes lease at Gila River Arena after determining it was a financial drain on the city and unfavorable to taxpayers.

“I don’t think any sports team would want to just negotiate with one party,” he said.

Worsley said his motivation was to help the Coyotes and to keep them in Arizona, even though he has never been to a hockey game and may never go to one. He also gave no assurances that the arena would be built in the East Valley, even though Coyotes officials who spoke at a hearing said they are targeting the East Valley or downtown Phoenix as their only viable options.

Ahron Cohen, the Coyotes general counsel, told the panel that the team’s present ownership is trying to correct a mistake made by a previous owner to move the team to Glendale, away from the team’s East Valley fan base.

“We’re trying to fix this,” Cohen said. “Previous ownership made a mistake going out there. It just has not worked.

“For us, the only viable option is a site in the East Valley or downtown Phoenix. The vast majority of premium ticketing revenue comes from the East Valley.”

Cohen noted that attendance was much better, especially for weeknight games, when the team played downtown at Talking Stick Arena. The primary problem at that arena was a large number of obstructed view seats that prevented fans from seeing both goals.

He said fans have difficulty getting from the East Valley on weekday nights to attend games, discouraging attendance.

Jim Norton, a Coyotes lobbyist, said the team has suitors in other Valley cities, but he did not name them. He said the team creates a $600 million economic impact and employs about 4,000 people.

“We have had a number of conversations with other jurisdictions who are not only interested, but have been courting us,” Norton said.

But the Coyotes faced stiff opposition at the hearing from Sen. Juan Mendez, D-Tempe, and Sean McCarthy, senior research analyst of the Arizona Tax Research Association.

McCarthy challenged the Coyotes’ argument that the team is creating new tax dollars by building an arena on a vacant site. He said that tax revenue is being collected from fans at Gila River Arena and that money would be spent at other venues without the new arena’s construction.

“You are not creating new disposable income. You are moving dollars around,” McCarthy said. “You can’t argue that moving dollars from one stadium to another is creating new dollars.”

Mendez said he does not favor using public money for private entities such as the Coyotes, a corporation.

But Mitchell Ziets of Tipping Point Sports, a Coyotes sports financing consultant, said history has shown that teams run into financial trouble when they finance their own stadiums and arenas without some sort of public-private partnership.